Homeland security industry dampered by lack of funding

Audio

Aired 4/19/09

After 9/11, homeland security was expected to become a growth industry. And San Diego, with its background as a major player in the defense industry, appeared to be well positioned to cash in on the boom. But in fact, there has not been a windfall of lucrative contracts in San Diego for either big or small businesses in the fledgling homeland security marketplace. KPBS reporter Alison St John has more.

In a conference room in Carmel Valley, Mike Ryan, a former Navy SEAL, shows off some new software.

Ryan:
Now what you're looking at here is a portal.

Ryan works for Crossflo --a small tech firm -- selling security oriented software. He demonstrates how typing in the name of someone suspicious encountered off-limits on a dock at the port of San Diego leads through computer links to other data bases to a connection between him and a crew member on a ship floating off shore.

Ryan:
And now we're able to see the data that that particular vessel is located off the coast of San Diego. There's a broad variety of different data sources. All of that data is owned by different people. It's all in different formats, OK? So how do we share information across platforms, across agencies? That's what our software is designed to do.

Crossflo is one of the start up companies formed after 9/11 to try their hand at developing homeland security applications. The firm succeeded in marketing its new product to the New Jersey State Police, but it's finding an uphill battle to get big federal contracts.

Even well established businesses like Cubic Corporation have found it hard to jump start the homeland security market. The company's explosive detection technology is in trials on the East Coast as part of its transit ticket vending machines contract. But Bruce Roberts of Cubic says San Diego does not feature as prominently as it should in the front lines of the homeland security industry.

Roberts:
When San Diego tried to position itself initially, we were slow in reacting as a region. Despite the fact that we work together very well, it took three years, maybe longer, for the security network to emerge in San Diego.

Lou Kelly is president of The Security Network, an industry group that was set up to promote new homeland security technologies. But despite the early promise of grand rewards, Kelly has had little success in getting grants or contracts.

Kelly:
Certainly, the security market is a very growing industry. Having said that, if you look at homeland security, it is filled with frustration.

Federal spending on domestic security has almost quadrupled since 2001.
But Bob Welty, head of the Center on Homeland Security at SDSU, says unlike the Department of Defense, which dolls out huge contracts, the Department of Homeland Security has a fraction of the money and sends those dollars down the pipeline for local authorities like cities and counties to control.

Welty:
Well, regionally it would be billions versus millions and single digit millions at that. And that's where we're stuck, and that's what we have to spend. And that's what we have to maximize and optimize in our spending.

Welty says San Diego's share of the Department of Homeland Security or DHS money shrank from $14 million last year to $6 million this year. Much of that went to improve communications. Local leaders, like Mayor Jerry Sanders, are pushing to get San Diego back on the DHS's priority list.

Ron Lane heads the County Office of Emergency Preparedness. He says after 9/11, the federal government required its grants be spent on things like gas masks and basic protective gear for first responders. Now the county has more discretion on how to spend DHS money. But Lane says spending on new technology is a gamble, because technology is changing so fast.

Lane:
We know there's tons of other capabilities out there. It's such an emerging market that a year from now, the ones we're looking at today are probably going to be obsolete and we're talking about new systems and priorities, so good luck keeping track of those.

For example, Lane says, San Diego just bought a reverse 911 system working, in which a computer calls home phones in an evacuation area. But it needs an upgrade because if a disaster happens during the day, most people are not sitting by their home phones - they're on their cells.

San Diego has benefited from some locally developed technology. For example, Vista-based Pacific Microwave Research has sold technology so video taken by fire fighting helicopters can be streamed live to first responders on the ground.

But the region is still handicapped by a lack of very basic technology. For example, first responders, like police and sheriff's departments, still need millions of dollars worth of upgrades to simply communicate effectively with each other.

Lou Kelly of the Security Network says local government simply doesn't have the resources to sponsor the innovations that could solve these kinds of problems. He's looking beyond government to market new security products to the private sector.

Kelly:
You've got probably 85 percent of that market that is not inside the Department of Homeland Security. Now how do you go after that market?

Kelly has set up working groups to connect within the industry, for example, companies that own critical infrastructure like electric power lines. But here he's hit another hurdle. Private industries are so hush hush about their vulnerabilities that it's like working in a hidden industry.

Though Kelly is working to get the public and private sectors talking about what's needed and what's possible, so far there's little actual investment to show for his efforts.

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